By Kim Yoo-chul
LG Group Chairman Koo Bon-moo said Monday that the group will undergo a major overhaul of its core business structure, including a sweeping personnel reshuffle at the top.
“We will go our own way,” Koo told reporters at the Westin Chosun Hotel, downtown Seoul, touching on problems facing the conglomerate’s flagship LG Electronics with regard to the smartphone business.
“Our new growth businesses are doing well. A careful review is being conducted on next year’s business plan,” Koo said, adding that the reshuffle is due next month.
LG Electronics has seen its bottom line hit hard due to its late start on smartphone marketing, among other issues.
This triggered Koo to fire CEO Nam Yong and bring in his younger brother Bon-joon to head the affiliate. The younger Koo is already reorganizing the struggling electronics giant by realigning its business structure by creating new units and slimming down marketing-driven departments as a means to boost its competitiveness in strategic key markets. The elder Koo’s move was expected but came as a surprise, given LG’s conservative management style.
Koo’s reference to new growth projects is also widely interpreted as a move to continue a shift to solar cells and next-generation lighting systems. LG has announced it will invest 10 trillion won in these areas.
Obviously, Koo is seeking to find a replacement for the group’s erstwhile cash cow LG Electronics. LG Chem has been solidifying its global business, while Koo Bon-joon headed LG Display in its earlier days.
LG officials said the shake-up is mainly targeting the group’s electronics unit as it needs more detailed selling strategies.
“LG Group is still experiencing a ‘consensus meeting (CM).’ We are being asked for more trimming-down processes,” Koo said.
CM is a strategy where the chairman meets the chief executives of key units and discusses pending issues before the final confirmation of business plans.
The chairman said LG plans to hire more research-related personnel, adding an announcement will come sometime next month.
LG has been strengthening its efforts in the highly-lucrative three dimensional (3D) display field. The chairman was recently briefed over “3D strategies” during his trip to a display facility in Paju, north of Seoul.